Then I hope you will learn today. This is my Money Management Habit.
Before, what I do after receiving my income is to pay all for my expenses and the remaining amount is my savings. This practice shows formula number 1.
But after attending some of the wealth courses, I learned that my habit is wrong. And because of my old habit, I was buried into debt.
On those trainings and wealth courses that I attended, I also found a community in which they helped me utilize my money management and promotes healthy habit especially in settling and getting out of my arrears. They helped me achieved formula number 2.
But before getting to formula 2, I underwent series of perfecting formula number 3. It is important that I need to practice allocating my money to know where I should get my savings and expenses.
Whenever I received an income either from passive income or active income, I divided it under six different classifications or percentages.
By the way, passive income is an income received on a regular basis with little effort required to maintain it. Examples are apartment rentals, video rentals, or dividends from your shares of stocks.
While active income is an income expected from exerting more of your time and efforts like salaries, wages, and commissions.
Going back to my allocations:
- 10% on my FFA (Financial Freedom Account)
In short, this account will help me financially free because this will be allocated for my future investments and businesses that will aid me generate more income.
- 10% on my LTSS (Long Term Savings for Saving)
I would save for my dream house which is to purchase an oceanfront property. An oceanfront property is very expensive these days.
My dream vacation is cruising on the Caribbean Sea and visiting the Caribbean countries.
On your part, you must have your dream car. Ferrari? Porsche convertible? Or your dream hi-tech gadgets!
- 10% on my Educational Account, for personal developments
Example, If I wanted to learn how to cook, then by all means, I will enroll in a culinary class.
- 50% on Necessities and Utilities
- 10% on Play Account
This is where I reward myself for the hard work that I accomplished by pampering myself at the spa, going out for a vacation like the beach, or buy things that I want without even looking at the price!
I don't have to worry because I already allotted a good sum for me to enjoy. Now I know why some of my closest friends are buying things without a care of how much does the item cost.
If I can't have enough on a daily basis, weekly basis, monthly basis, go for quarterly! Or I do it yearly!
There is a saying, "When you give you receive". "When you give tenfold, you will receive a hundredfold or more!
One method I do is tithing. Do you believe in tithing? I give 10% to God's storehouse so that His workers can do their missionary vocations.
On today's many ways of saving money like money jars, piggy banks, and envelopes, I used the bank savings account in which I also divided into six different account names as easy guide in allocating the money.
Then every income receivables, the percentages were automatically distributed.
An exercise:
How about if I charge my expenses to my credit card? Do you have any idea on how to pay this?
Simple answer:
Whatever or where ever you spend, determine under which classification does it fall and this is where you take out the fund.
You don't have to follow my percentages. Make your own partition, the important is... you know how to divide your money.
Practice makes it perfect but it's just not it! Practice forms a habit. Repetition is a habit.
Manage your money and form a healthy habit.
- 10% on Charities and Donations
There is a saying, "When you give you receive". "When you give tenfold, you will receive a hundredfold or more!
One method I do is tithing. Do you believe in tithing? I give 10% to God's storehouse so that His workers can do their missionary vocations.
On today's many ways of saving money like money jars, piggy banks, and envelopes, I used the bank savings account in which I also divided into six different account names as easy guide in allocating the money.
Then every income receivables, the percentages were automatically distributed.
An exercise:
How about if I charge my expenses to my credit card? Do you have any idea on how to pay this?
Simple answer:
Whatever or where ever you spend, determine under which classification does it fall and this is where you take out the fund.
You don't have to follow my percentages. Make your own partition, the important is... you know how to divide your money.
Practice makes it perfect but it's just not it! Practice forms a habit. Repetition is a habit.
Manage your money and form a healthy habit.
thanks for sharing this. :)
ReplyDeleteWhen budgeting my money, I usually put down savings as part of the expenses. It is a good strategy, because it’s guilt-free. Just imagine that you're spending your money on something, rather than thinking that you're just putting it away for future use. That way, you don't get an impulse to look back at it any time soon, because you've already considered it as "spent" money. It’s also a win-win situation, especially if there was an excess in your budget.
ReplyDeleteLilia Costales
You are very correct there Lilia! Am excited more people are starting to be aware of how they spend their money! Next move for abundance is to make your money work for you.
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